Financial Markets…Kazakhstan’s central bank devalued its tenge currency by 19% to 185 per dollar in an effort to hinder foreign speculators and adjust to the currency weakening of its main trading partner Russia. The Russian ruble, which is a reserve currency of Kazakhstan along with dollars and euros, has weakened 5.4% thus far this year. This has put additional pressure on the Kazakhstan currency as Russia accounted for nearly 18 % of Kazakhstan’s total trade, second after the European Union at about 41%.

Slovenia issued its first dollar-denominated bonds since last May as the risk of a sovereign bailout reduced following an overhaul of the country’s banking sector. The country raised $1.5 billion in 5-year note and $2 billion in 10-year bond, each yielding 280 basis points over the comparable U.S. Treasuries. The overall size of orders for both issues surpassed €16 billion, reflecting strong foreign demand for the country’s new debt.

High Income Economies… While noting that the unemployment rate in January was at a 5-year low of 6.6%, U.S. Fed chairperson Janet Yellen, in her remarks prepared for Congress, said that the rate remains "well above levels" the Fed sees as consistent with maximum sustainable employment. More specifically, Yellen said that crossing the Fed's 6.5% unemployment target would not trigger an automatic hike in the benchmark interest rate from zero as "the recovery in the labor market is far from complete."

Signaling that the non-mining sector is improving, National Australia Bank's (NAB) monthly survey of business confidence ticked up for the first time in 4 months in January, rising 2 points to 8, its best score since September (when it was 12). NAB attributed the gains in part to monetary policy, which has kept interest rates low and resulted in currency depreciation, giving the non-mining sector "surprisingly good traction."

Developing Economies… Latin America and the Caribbean: Mexico’s industrial production remained weak in December 2013, decreasing 0.3% (y/y), following a 1.4% (y/y) decline in the previous month. Contributing to the December outturn, construction output fell 2.5% (y/y), and mining output decreased 1.3% (y/y), while production in the utilities sector rose 1.5% and manufacturing output increased 1.1% (y/y). Month-on-month, industrial production contracted by 0.5% in December after rising 0.1% in November. For the year 2013 as a whole, industrial production fell 0.7%, brought down by a 4.7% decline in construction output and 1.7% decrease in mining output; while manufacturing output increased 1.4% and production in the utilities expanded 0.2%.

South Asia: India’s merchandise exports grew at a sluggish pace for the third consecutive month in January 2014, rising 3.8% (y/y). Meanwhile, merchandise imports decreased by 18.1% (y/y), owing to falling gold imports, helping to reduce the trade deficit, which fell markedly to US$9.91bn (y/y) from US$18.9bn the previous year.

Sub-Saharan Africa: South Africa’s manufacturing production expanded at a fast pace in December 2013, rising 2.5% (y/y) following a 0.3% (y/y) increase in November. Driving this pick-up in manufacturing, production of food and beverages rose 5.0% (y/y), and output of basic iron and steel, non-ferrous metal, metal products and machinery increased 2.5% (y/y. Month-on-month, manufacturing production rose a seasonally adjusted 0.4% after increasing 0.3% in November. In the three months ended December 2013, manufacturing production rose 2.4% (3m/3m, sa). For the year 2013 as a whole, manufacturing production grew at a slower pace, advancing 1.3% compared with 2.4% in the previous year.

Meanwhile, South Africa’s unemployment rate, one of the highest among emerging markets, fell for the second consecutive quarter, decreasing from the revised 24.5% in the third quarter of 2013 to 24.1% in the fourth quarter, helped by an increase in government employment and hiring in the informal industry. Compared with the third quarter, the number of unemployed persons fell by 50,000 in Q4 while employment increased by 141,000. The highest job gains were observed in the public sector, the retail and wholesale industries, and the construction industry; while the biggest job losses came from agriculture, followed by the financial services industry, and manufacturing.

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